SBIR Woes

An oddly titled (“Start-Ups Say Innovation Doesn’t Grow on Trees”) Washington Post column by Kim Hart laments the absence of a 2.8% set-aside for SBIR/STTR awards in the $10B the NIH received in ARRA funds and notes lobbying efforts for Congressional reauthorization of the small business set-aside program:

Cha-Mei Tang, chief executive of Potomac-based Creatv MicroTech, said she submitted a grant application last week to help hire more employees to gather patient samples and statistics in the development of a tool to detect chronic lymphocytic leukemia. She said past efforts to compete for funds that are not reserved for small businesses have been unsuccessful, so she is concerned that companies will not have much of a shot at stimulus money.

“Everything we sell is based on SBIR funding,” Tang said. She said she plans to visit lawmakers on Capitol Hill this week. The House is scheduled this week to take action to reauthorize the SBIR program, which expires at the end of July. The biggest issue in question is whether venture-backed firms should have access to SBIR grants.

Perhaps Creatv MicroTech should consider why they have been unsuccessful in competing for R&D funding and whether this reflects on the soundness of their science, study design, expertise, facilities, etc.

The Enhancing Small Business Research and Innovation Act of 2009 is being reviewed by the House Committee on Science and Technology, whose Chair Bart Gordon (D-Tenn) calls it “one of the most significant bills the Committee will likely address in this Congress”. Right now, the bill extends the life of SBIR/STTR only until 2011 (corresponding Senate bill, SBIR/STTR Reauthorization Act of 2009 [S. 1233], goes through 2023 and gradually increases the set-aside amount until it reaches 3.5% in 2020). Usually, the program is reauthorized for 8-year cycles.

Both bills increase the award levels, and the House also shortens the application review period. One presumes the NIH will be among those extending the 90-day deadline to 180 days recommended in the House report:

The section also directs Federal agencies to render a final decision on each proposal 90 days after the date a solicitation closes. A clear timeline will allow applicants to better forecast and prepare for receipt of potential SBIR awards. Recognizing that the agencies will not be able to meet with this directive in all cases, the section provides the agencies with the authority to extend the 90-day deadline to a 180-day deadline on a case-by-case basis.

Regardless, Aprile Pilon of Clarassance, a Rockville-based biopharmaceutical company, “argues that small-business applications get tougher scrutiny than those from academic institutions, and she claims that the board reviewing the applications is largely made up of university representatives.”

What a shocker that the NIH would want to have qualified scientists review the science. Never mind that the paylines for SBIR/STTR grants are much higher than those for the basic biomedical research that will eventually become available for commercialization.

Oh, the Post piece notes that:

Cardin, Van Hollen and Edwards [all D-Md reps] sent a pointed letter to [acting NIH Director] Kington after the hearing [on the SBIR reauthorization bill], saying that his “absence sent a message of indifference.”

Hmm. Wonder what Ray might have on his plate that could possibly be more important than small-business set asides?

Now, not that I am against the NIH Small Business Research programs. Far from it. But when the NIH has to keep raising paylines because there aren’t enough scientifically outstanding and excellent applications competing for these Congressionally designated funds, perhaps industry should put as much effort into evaluating their research practices as lobbying for more federal set-asides.

whimplesaid

Not that I disagree with the idea that the NIH has no business funding business, but I think Pilon is correct to point out that the NIH’s definition of “qualified scientist” is circular (NIH-funded grant-writers responsible for determining which grants are funded by the NIH). New investigators have been bitching about this for years.

Dsaid

Good point. The real qualification though is peer reviewed publications and promotion. You just can’t get those unless you have NIH or NSF grants in the US.

If an applicant says that a member of a panel is not qualified but you can show a list of 10 publications in the subject area and they are a tenured Assoc. Prof the applicant loses the appeal.

The real question is who else do you pick as a reviewer and what objective appeal-proof criteria do you use to pick them? Who should be reviewing grants and would they make different and better scoring decisions? What exactly would be a better scoring decision?

As an aside, CSR has a rule that no more than 10% of a panel can be Assistant Profs. The rule came about because complaining senior researchers could make the argument that a junior prof is not their “peer.”

As an aside, CSR has a rule that no more than 10% of a panel can be Assistant Profs. The rule came about because complaining senior researchers could make the argument that a junior prof is not their “peer.”

Are you trying to punch my buttons, holmes? They didn’t make any “argument”. What they did was complain about having to (gasp) finally revise a grant for once and place blame on assistant prof reviewers without a shred of decent evidence. And Scarpa bought it hook, line and sinker.

hint: at less than 10% of review panels and most of the time ad hocs with lower per-person loads, how exactly were Asst Profs having a significant effect on review outcome? A whole host of great proposals being torpedoed unjustifiably by that dang asst. prof. (who, btw, had to have an R01 funded and was thus usually in at least year 4 or 5 at the n00b-est)

whimplesaid

Presumably figuring this out is CSR’s full-time job. I hope they have some metric by which they can determine whether review is working or not from the perspective of the American taxpayer footing the bill, but my suspicion is that the real metric CSR uses goes something along the lines of “minimizes whining from current NIH-fundees”.

Dsaid

To : Whimple—Exactly…..Although I am sure that CSR could come up with a metric that proves they are doing things exactly perfectly with the utmost efficiency and value to the US taxpayer. Since they know the answer seems like a waste of money to prove it though. 😉

Dsaid

Drugmonkey, let me put a little Lidocaine on that nerve. I am not saying that it was a good argument. I agree that argument=whine=subtle threat. Depends on your perspective. I think a cap like this is very unscientific and shows CSR’s lack of trust in their own SROs. I bet if you surveyed SROs they would say how the love to use Asst. Profs because they work harder, turn in critiques on time, prepare for the meetings and have recent experience actually doing experiments at the bench.

But, no one looks good if IC councils overturn reviews on appeal. (Who is it on IC councils? Oh yes, very senior funded scientists who are an easy sell for that argument). So, CSR has to take away as much ammo as possible. Limiting junior faculty on review panels (irrespective of their expertise, diligence and ability to affect the outcome) is an easy bullet to take away. This is realpolitik NIH style. Unscientific but nicely bureaucratic and solves the problem.

Until a new set of squeeky wheels demands change loudly and consistently (preferably through their Congressperson or Senator. NIH quakes when they calls from Congress) nothing will change. Of course even when it does change it will only be cosmetic. New scoring system anyone? Perhaps a shorter application or new summary statement template? Ooops. My cynicism is showing.

BBsaid

2 observations:
1) One of my grants was reviewed by a panel that was > 50% ad hoc from biotech/pharma. Don’t care how many pubs they had, they are not my peers.

2) I agree about the whining. Businesses have other channels for funds: venture capital, commercial loans, personal investments, etc. Academic scientists have no other channels but grants/awards. I don’t see any of us becoming another Alfred Loomis or Peter Mitchell.

Not Academicsaid

Research whether done by business or NIH is useful to society. Entrepreneurs invest their personal money and take huge risks to innovate. This board seems to be full of “academics” trying to pretend like they are the only researchers coming up with anything product.

I would like to see academics take a personal loan or invest their savings on their pet research project. It is not like the Government funded technologies developed by universities are being released as open source or free ware. Universities behave worse than than business when it comes to making money off the government funded research.

BBsaid

No, I say it because the terms of employment at companies are so different from academia (I worked in pharma for years before switiching). Authors on papers from industry often include team-leaders or managers, in addition to the scientists who really did the work. Papers with a “contrary” viewpoint may be suppressed; data may be skewed. Believe when I say I’ve seen it all, even to a colleague not being allowed to present her own original work at a meeting because a manager thought she wasn’t good-looking enough; they sent a younger man who had nothing to do with the project.

Jeffrey Mervis has a news item in Science about a coalition of scientific societies, led by FASEB, lobbying against the Senate expansion of the SBIR program (in terms of set-asides – but also, I’m sure, the duration). I’m not quite sure why it is the scientific community’s fault that ARRA funds did not include the usual SBIR set-asides (Mervis suggests “That move could come back to haunt the research community”). In any case, $40M has been set aside for SBIR RFAs.

Dsaid

Y. pestissaid

If the attitude of participants in discussion is representative to the review panels, then no wonder there is a bias against small business scientists, reflected by worse scores and then claims of “inferior quality”. Who cares that these claims are often based on the foundation of pseudo-scientific babble, manufactured for the sole purpose of proving that SBIR applications do not deserve the honor…

Dsaid

“Who cares that these claims are often based on the foundation of pseudo-scientific babble, manufactured for the sole purpose of proving that SBIR applications do not deserve the honor”

is??????

I have seen some great SBIR grants and a lot that are “pseudo-scientific babble”. On average they are worse than R01s both in the writing and in the science. The fact that you can’t convince private investors or standing study sections (two independent and very different groups of people) that your science is any good says a lot about the general quality of SBIR proposals.

It would be interesting though to hear about some SBIR success stories.

Y. pestissaid

For example, the issue I had to address in the Introduction I just finished writing. A reviewer trashed not just my proposal, but the WHOLE AREA of scientific endeavor (peptides). What was the argument? That nothing novel is possible, because:

“Every possible configuration and combination thereof, for peptide/peptoids of size 5-50 were made. These now reside comfortably in vials in the catacombs of compound inventories.”

[Explanation for the Academic Scientists reading this blog: The mass involved would exceed the mass of all the stars in the whole observable universe! A high school student can calculate this!] This is the level of argumentation SBIRs deal with! Of course, this is not, strictly speaking, evidence. You don’t have access to summary statements, so you may accuse me of dreaming this absurdity up.

Dsaid

My point is not whether you got a crappy review but why folks at small businesses get an extra shot at getting their grants funded. As I already said above, scientists at small businesses can apply for R01s and R43/44s but University scientists can only apply for R01s. (This doesn’t count the savvy academics who start a sham company that “leases” space from the University so that they can apply for SBIRs).

Why should small business scientists get an extra mechanism? The argument that they are judged more harshly in study sections simply because they are small businesses is BS. That is the evidence I want to see.

PS The criticism you described above is likely grounds for an appeal. If you can show that you got a bad score based on that incorrect fact. I am surprised that the SRO didn’t edit it out of the critique. They must be very busy.

Y. pestissaid

Why small businesses deserve another specific mechanism? Because of certain specific disadvantage. Proposals are judged not only on the basis of their strictly scientific merit. There are also “soft” criteria, such as “Environment”. Right? Small business often has only the equipment it needs to carry out the proposed research. Conversely, an academic scientist can list thousands of square feet of labs, equipped core facilities, Nobel prize winners having offices down the corridor, and tons of equipment loosely (or not at all) connected to the project. All this impresses the review panels and gives the academic scientist some advantage (which is sufficient in a highly competitive environment).

I once made an experiment: I sent:
(a) some material stripped down to its purely scientific features. Got rather offensive critiques, “know your place, boy”. Then:
(b) I added a support letter form someone quite prominent . Lo and behold, the critiques suddenly became more rational…

Actually, the whole review process is based on such soft factors. For sure you know the most basic advice given to applicants: “impress the reviewers, elicit their enthusiasm, make them the advocates of your proposal’. Right? Perception, my friend, perception… The rest, including the specific contents of your Summary Statement, is rationalization, manufactured for the sole purpose of justifying the impression of the reviewers… A high profile university in Massachusetts has an immediate advantage of positive perception over some company from, say, Montana, which employs 5 people. REGARDLESS of the scientific quality of their respective proposals.

Y. pestissaid

P.S. You will never see such hard evidence – this kind of evidence would open the door to quite serious litigation, and for this reason no reviewer will ever admit it, nor an SRA will support an applicant going after an idiotic review. But there is abundant circumstantial evidence: again, please consider the predominant attitude on this forum toward SBIRs…

Dsaid

I will state my opinion one more time. Your complaints are exactly the same as those from unfunded faculty members at every school not in the top 20. “If you are from Harvard/UCSF/JHU/etc you have an advantage.” You are correct. They do. And Everyone not at those schools has to compete with them. That includes small businesses as well as Meherry, the University of South Dakota, the College of William and Mary etc. Your grants are in the same boat as the 80% of grants that never get funded.

As for the soft factors, all of the review criteria are based on opinion. They are all soft factors. And, in my experience, environment (with the exception of large center grants and major pieces of essential equipment) is never given much wait in the final score. But again, Everyone gets judged on that criteria not just small businesses.

Again. Why should a small business be treated any differently from a small or medium sized school? My attitude is why do you deserve a break and not them?

As for you PS. If, as you said, it is stated in your SS it is hard evidence.

PS. The advantage enjoyed by The Top 20 schools also has some downsides. Faculty are expected to have 2 or more NIH funded grants to get promotion and tenure.

Dsaid

Good point. I would also consider cutting some of the T mechanisms too. Although even cutting all of the Ts, Ks, R43/44s and R15s is a drop in the bucket (actually 8% so a big drop) compared to the R01/R21 and Center Grants pools. (According to 2008 numbers from the NIH RePorter)

BTW, I don’t advocate cutting the R43 pool. But, I also don’t think it should be expanded. Especially at the expense of other R mechanisms.

Y. pestissaid

There is a simple solution: make the review process blind. The reviewers should see no applicant names, no affiliations, no support letters, just short proposals stripped down to bare science. Then the playing field would be level and no set-asides would be necessary.

Alex Terrazassaid

The faculty on this blog could not survive in business. They think they are mini-entrepreneurs but they are not. I have received and reviewed SBIRs and they are very competitive. First, faculty have much larger resources to draw upon. If the small business doesn’t get the grant, they don’t get paid, can’t rent space, can’t pay overhead. Second, most junior faculty have senior faculty help them write the grant in the first place. The SBIRs are reviewed primarily by faculty who come into the review after getting bloodied on their RO1’s. I challenge any of you out their to try to put together a team for a new business venture and try to get it funded. If the SBIR is so easy, jump on in. I should mention that we get to control all of our indirect costs and get a nice 7% profit. Come on guys, give it a try!

Dsaid

I am not sure about your experience with academia but if junior prof doesn’t get a grant they…lose their job. If senior faculty don’t get a grant they….have to close their lab. A tenured Prof might not lose his job but shutting down a lab, firing employees and ending your research project is a painful experience.

Sounds very similar to me.

I will say that a small business is a much riskier enterprise that academia. But, the rewards are much greater too.

Y. pestissaid

I would like to quote a summary statement I recently received (ARRA Challenge Grants, open for both businesses and academia):

“5. Environment:
Weaknesses
• —-, LLC is a very small operation (——) and it is not clear whether it can survive in these difficult economic times. Since half of the project and
budget [actually, it was precisely 1/3] are devoted to (—-) contributions this seems a serious concern.”

As long as there are such criteria, small businesses CANNOT compete with the academia on a level playing field.